Select Water Solutions, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Select Water Solutions 2024 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded. I will now turn the conference over to your host, Chris George, Executive Vice President and Chief Financial Officer for Select Water Solutions. Thank you. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for Select Water Solutions conference call and webcast to review our financial and operational results for the first quarter of 2024. With me today are John Schmitz, our founder, chairman, president, and CEO, and Michael Scarkey, executive vice president and chief operating officer. Before I turn the call over to John, I have a few housekeeping items to cover. A replay of today's call will be available by webcast and accessible from our website at selectwater.com. There will also be a recorded telephonic replay available until May 15, 2024. The access information for this replay was also included in yesterday's earnings release. Please note that the information reported on this call speaks only as of today, May 1, 2024, and therefore time-sensitive information may no longer be accurate as of the time of the replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Select's management. However, various risks, uncertainties, and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements by management. The listener is encouraged to read our annual report on Form 10-K, our current reports on Form 8-K, as well as our quarterly reports on Form 10-Q, to understand those risks, uncertainties, and contingencies. Please refer to our earnings announcement released yesterday for reconciliations of non-GAAP financial measures. As a reminder, the company made certain changes to its segment reporting structure during the second quarter of 2023. These changes were driven by several operational and strategic factors. However, the changes in segment reporting had no impact on the company's historical consolidated financial position, results of operations, or cash flows. Prior periods have been recast to include the water sourcing and temporary water logistics operations within the water services segment and remove the results of those operations from the water infrastructure segment. Historical segment information recast to conform to the new reporting structure is available as supplemental financial information in the investors section of the company's website at investors.selectwater.com. Please refer to the company's current report on Form 8K filed with the SEC concurrent with our earnings release for additional information. Now I'd like to turn the call over to our Founder Chairman, President and CEO, John Schmitz.

Thanks, Chris. Good morning, and thank you for joining us. I'm pleased to be discussing Select Water Solutions again with you today. It's been a very busy start to 2024. Overall, the business performed well during the first quarter, and we sit here in a strong position heading into quarter two. Highlights of the first quarter included growing revenues and margins in both the water infrastructure and chemical technology segments, which supported sequential improvements in the consolidated gross margin and adjusted EBITDA, which came in ahead of our expectations. I'm especially pleased with the continual progress we have made toward the execution of our water infrastructure growth strategy. In addition to the three previous Sunhouse acquisitions in the Hainesville and the Rockies regions that we closed in January, we completed additional acquisitions in the Permian and Bakken regions in March and April. Each of these acquisitions demonstrates our ability to execute on strategic but value-oriented opportunities to efficiently expand our infrastructure network across the geographic footprint. With the recent Trinity acquisitions, we are adding more than 600,000 barrels per day of permitted disposal capacity, primarily in the Permian Basin across 24 active disposal wells and nine additional disposal permits available for future development. This acquisition adds critical disposal capacity in both the Midland and Delaware basins, an area with some of our most robust growth opportunities. And with the nearly 100 miles of gathering pipelines already integrated in the acquired assets, we have significant optionality and development potential to integrate these assets with our existing Permian infrastructure networks. Disposal remains a necessary component of an efficient, full lifecycle infrastructure solution, and these disposal assets will strengthen our ability to develop efficient and creative solutions for our customers. Additionally, we have continued to add to our solids waste management solutions as well, with four of the five acquisitions so far this year contributing additional assets to our waste solution capabilities. With Trinity, we have added additional slurry well in the Gulf Coast region that adds scale to our solids waste management business in East Texas alongside the solids treatment and disposal assets and operations we acquired from Tri-State and Iron Mountain in January. Separately, with Buckhorn, we acquired two solid waste landfills in the Bakken with nearly 400,000 tons of annual capacity and more than 50 years of remaining potential useful life. These facilities are strategically located in North Dakota and Montana and add significant additional capacity to our existing landfill operations in the basin. Importantly, this acquisition also expands the scope of our service capabilities through the addition of a Class II landfill, one of the very few active T-norm disposal facilities in the U.S., as well as Class I industrial waste disposal permit, presenting additional opportunities for future development. We believe the addition of the Buckhorn assets will also help us enhance the revenue and margin profile of our existing landfill operations with the integrated logistics and enhanced customer relationships. These facilities allow Select to further capture the full water and waste lifecycle of our customers' operations, including environmental management and downstream remediation. I'd also highlight that with both Trinity and Buckhorn, we are also adding lean but very high-performing operational teams with decades of experience in disposal and waste management solution, and I welcome these new employees into the Select family. While we continue to grow our water infrastructure business through acquisitions, we also continue to grow through the organic business development execution. During the first quarter, we signed four additional long-term contracts for new pipeline gathering, recycling, and disposal projects that will integrate directly into our existing infrastructure in the Hainesville and the Permian. Each of these contracts can be tied directly to the strength of our existing networks in these regions, including from the recently acquired asset in each basin. While we have been quite active this year, we remain attentive to every dollar of capital we deploy and continue to prioritize capital to the most strategic area of our business, especially where we have the most opportunity to integrate full life cycle water infrastructure and waste management solutions around our existing asset base or add proprietary application of automation, chemistry, or recycling technologies. And as demonstrated by the breadth of our recent acquisitions and projects, I believe Select's operation and geographic diversity is one of our core strengths and competitive differentiators. It also provides us with a wide array of capital allocation prospects that allows us to make the best decision to drive long-term shareholder value. Importantly, Each acquisition and project we've executed this year fits our strategy to grow and expand our production-based and long-term contracted revenue within our water infrastructure segment. We are well positioned to continue to strengthen the contractual relationship we have with our customers and expand the scope of our end-to-end water services and chemical solutions that we've been able to provide around the infrastructure base. Our recent organic recycle and disposal infrastructure projects have delivered strong performance, as seen in the meaningful margin improvement in the water infrastructure segment during the first quarter. I am very confident in our remaining multi-year backlog for both green fill and brown fill infrastructure projects. We've seen this backlog more than double over the last two quarters, providing visibility into continuing expansion opportunities well into next year, and I'm very excited to add the newly acquired assets into our future business development planning as well. From a customer standpoint, we continue to see consolidation in the NP space. We believe this will drive continued demand for more sophisticated and comprehensive water management and waste solutions. While we oftentimes find ourselves working for both customers on both sides of the larger deals, we have generally aligned ourselves with the industry consolidators and have an extensive business development backlog in place to meet the needs of their growing infrastructure demands. Chris will touch on the first quarter's financial performance in more detail, but I'm proud of the continued outstanding results our team is achieving during the period of changing industry trends. We will continue to generate a strong return on assets and return capital to our shareholders while investing in and growing the business. At this point, I'll hand it over to Chris to speak to our first quarter financial results and remaining 2024 outlook in a bit more detail. Chris?